Cardano founder and early Ethereum co-founder Charles Hoskinson delivered a scathing critique of Bitcoin's quantum resistance proposal BIP 361 during a live stream this week, arguing that the plan is actually a camouflaged hard fork that could result in the permanent loss or seizure of approximately 1.7 million BTC, including an estimated 1.1 million BTC believed to belong to Satoshi Nakamoto.
Quantum Threat Exposes 34% of Supply
Hoskinson cited on-chain data showing that as of March 1, 2026, more than 34% of all circulating bitcoins (about 8 million BTC) carry exposed public keys, making them vulnerable to any attacker with sufficiently powerful quantum computers. “34% of your supply is vulnerable,” he said. “And unfortunately, you're going to have to deal with it.”
BIP 361: Soft Fork or Hard Fork?
The proposal, authored by Bitcoin developers Jameson Lopp, Christian Papathanasiou, Ian Smith, Joe Ross, Steve Vaile, and Pierre-Luc Dallaire-Demers, aims to freeze funds at risk from quantum attacks and force users to migrate to post-quantum addresses. While BIP 361 describes itself as a soft fork, Hoskinson insists its underlying mechanism requires a hard fork—a type of upgrade Bitcoin has never executed. “You need a hard fork to actually do this,” he stated. “But don't take my word for it. I'm just a 'sh**coiner.' You'll see it yourself later.”
The proposal outlines a zero-knowledge (ZK) proof recovery system that would allow holders of HD wallet seed phrases to reclaim frozen coins. However, Hoskinson noted that this mechanism fails for wallets created before the widespread adoption of BIP 32 and BIP 39 standards, which happened around 2013. Those older wallets hold roughly 1.7 million BTC, including Satoshi's early mining rewards. “There is no zero-knowledge proof I can construct for such a system,” Hoskinson claimed. “I make my living building these systems.”
The Governance Gap
Hoskinson pointed to Bitcoin's lack of on-chain governance as the structural reason for the messy situation. He contrasted Bitcoin with blockchain projects like Cardano, Polkadot, and Tezos, which have formal governance mechanisms enabling community voting on protocol-level decisions. Without such a system, he predicted that by the 2030s Bitcoin would face two grim options: either let a quantum-capable attacker drain vulnerable addresses and dump a huge chunk of supply onto the open market, or force a hard fork that permanently makes 1.7 million BTC unspendable.
He also highlighted the role of institutional holders. BlackRock, Strategy (formerly MicroStrategy), and the U.S. government—reportedly holding strategic reserves—have accumulated enormous Bitcoin positions. Hoskinson suggested these entities will ultimately compel Bitcoin developers to act, regardless of ideological resistance from the community. “They own you now,” he said. “They will force you to do this, and they will steal all of Satoshi's coins.” He added, sarcastically: “I'm very, very sorry, Satoshi. You lost all your money.”
A Call for a Proper Hard Fork
Despite acknowledging he has no authority in the Bitcoin ecosystem, Hoskinson urged Bitcoin developers to embrace a hard fork if necessary, use it as an opportunity to modernize the protocol, and bring in new technical leadership. “If you're going to fork, do it right,” he concluded. Meanwhile, he noted that Cardano, Ethereum, and Solana are all working on post-quantum solutions on their own timelines, and that on-chain governance gives projects like Cardano a formal way to make such collective decisions.